1. Field of the Invention
The present invention relates to transaction systems, and particularly to card payment systems for children.
2. Description of Related Art
Card payment systems are commonplace, allowing users to make payments using a credit or debit card. While credit card charges accumulate debt that the cardholder needs to settle periodically, debit card charges draw money from the funds available in an account. The terms “charge card” or “payment card” will be used hereinbelow to relate to both credit and debit cards.
A charge card is associated with an account that is established with and managed by a card issuer. The card issuer is an entity that manages payments on behalf of the cardholder, and can be a bank, credit card company, telephone company, workplace, school, etc. The charge card is accepted by participating merchants, who sign with a transaction acquirer, which can be the same or other than the card issuer. In a typical transaction, the merchant calculates the payment amount, the cardholder submits his card for payment, the card adequacy to pay is verified by a process called “authorization”, the payment particulars are recorded by the merchant's POS (point of sale), and then, either in real time or as part of an end-of-day procedure, the transaction records are sent from the merchant to his acquirer for settlement. The transaction is finalized when the acquirer settles with the card issuer (if the issuer is another entity), and funds are transferred to the merchant's account on the one hand, and are charged to the cardholder's account on the other hand. Often the amount transferred to the merchant's account is slightly smaller than the one charged to the cardholder's account, the difference being a fee collected by the issuer, acquirer and/or an interchange network between the acquirer and the issuer.
The card is a means for a cardholder to identify his account and authorize transactions therewith. It can have the well-known form factor of a plastic card with embossment and magnetic stripe; it can be a contact or contactless smart card having a variety of form factors such as plastic card or a key fob; it can even be just a record of account details used for performing electronic transactions over the Internet or a cellular network.
FIG. 2 is a schematic block diagram that describes an exemplary card payment system 200 of the background art. A payment card 204 makes a payment transaction 208 with a merchant POS 212. The merchant POS 212 contacts charge back-end system 230 for making authorization 216. If the transaction is successfully authorized, the cardholder receives his merchandise or service from the merchant (not shown). The transaction particulars are then sent to charge back-end system 230 for settlement 220, either immediately or in a batch mode at the end of the day. The transaction is ultimately completed when the charge back-end system 230 makes a charge 234 to a user account 250 associated with payment card 204, and transfers the respective funds by a funds transfer 238 to a merchant account 260 associated with merchant POS 212.
The charge back-end system 230 of FIG. 2 is a representative of a large variety of systems of a wide range of complexities. It includes servers hosting databases and processing means, communication networks, and security infrastructures. Apparently, the most complex yet common representation of charge back-end system 230 is that of the common credit cards, involving a huge network of servers of issuing banks, servers of acquiring banks, servers of transaction processors and a huge international communication network. On the other extreme, a school payment system may have charge back-end system 230 implemented in a single personal computer that recognizes the student cards to charge parent-funded accounts for meals.
Of a special interest to the present invention are child accounts. Child accounts are established and funded by parents or legal tutors for allowing the children to make payments. FIG. 1A describes one arrangement wherein an ancillary child account 108 is actually a sub-account of a parent or tutor account 104. In this case, all transactions made by child card 150 are completed by direct charges to parent account 104. In an alternative arrangement of FIG. 1B, child account 138 is a separate account from parent account 130, possibly managed by another issuer, and funded by explicit transfers 134 from their parent account 130, or even by cash sent by the parent and deposited in child account 138. In both variations of FIGS. 1A-B, the child uses child card 150 to make charges 148 to the respective child account.
A closer look at ancillary child account 108 or child account 138, shows a log 112 which records all transactions received from charge back-end system 230 (FIG. 2) for queries and for producing monthly statements, a limit 116 that represents the instant amount that can be spent, and optionally also restrictions 120 entered by the parent, that determine at what merchants the card can be used, the number of transactions allowed per month, etc. Parent control 160 is a computerized control panel that uses Internet-based link 102 or the combination of links 102A and 102B to effect limit 116 (through child account replenishment or explicit funds transfer) and update restrictions 120. Limit 116 and restrictions 120 of FIGS. 1A and 11B express a fundamental desire of parents not only to provide payment means to their children but also to control how much can be spent and for what purpose. Several known systems teach various methods for restrictions 120 that determine how much a child can spend, at what merchants, and through what number of purchases.
All the control methods described above are authoritative in nature: they are limiting where, how much and how often a child can make purchases. They lack, however, the ability to positively encourage certain purchases over other purchases.
There is thus a need for, and it would be advantageous to have, card-based payment solutions that will allow parents to positively encourage their children to prefer certain purchases over other purchases.